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Impact of Structural Change in Education, Industry and Infrastructure on Income Distribution in Sri Lanka

Author

Listed:
  • Ramani Gunatilaka
  • Duangkamon Chotikapanich
  • Brett Inder

Abstract

Income inequality increased in Sri Lanka following trade liberalization in 1977. This study applies a semi-parametric method to investigate whether structural changes in education, industry and infrastructure access underlay the change in the distribution. The study finds that while the concentration of people shifted towards higher income ranges at every stage in the distribution between 1985 and 2002, changes in access to infrastructure triggered much of the shift. Higher levels of educational attainment also had an impact. But the middle classes appear to have benefited disproportionately more from the provision of education and infrastructure services than did the poor. The analysis recommends that such services are targeted more effectively towards those in the poorest income deciles to enable them to move out of poverty to higher income ranges.

Suggested Citation

  • Ramani Gunatilaka & Duangkamon Chotikapanich & Brett Inder, 2006. "Impact of Structural Change in Education, Industry and Infrastructure on Income Distribution in Sri Lanka," Monash Econometrics and Business Statistics Working Papers 21/06, Monash University, Department of Econometrics and Business Statistics.
    • Handle: RePEc:msh:ebswps:2006-21
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    File URL: http://www.buseco.monash.edu.au/ebs/pubs/wpapers/2006/wp21-06.pdf
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    References listed on IDEAS

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    Cited by:

    1. S. R. Osmani, 2008. "The Demands of Inclusive Growth: Lessons from South Asia (The Mahbub Ul Haq Memorial Lecture)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 381-402.

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    More about this item

    Keywords

    Income inequality; Sri Lanka; education; infrastructure; kernel density decomposition;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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